Towns back bill to make banks repair foreclosed sites

LITTLE EGG HARBOR TOWNSHIP - Local municipalities soon may have the power to haul into court banks that hold foreclosed homes but aren't maintaining them.

A bill approved by the state Assembly in a 72-2 vote Thursday would allow municipalities to impose penalties on creditors that fail to remedy code violations of certain properties in foreclosure. The legislation now goes to the state Senate.

Little Egg Harbor Township Mayor Arthur Midgley said the legislation has his municipality's full support. The Township Committee recently passed a resolution in support of the state bill.

"This will help us hold these banks responsible to get these properties cleaned up and sold in our township," Midgley said.

In the wake of Hurricane Sandy, the problem of vacant and abandoned residential properties has become more prevalent. In the township's hardest-hit section of Mystic Island, empty homes line the streets - some in the foreclosure process, some abandoned.

Some of the foreclosed properties are outside Mystic Island, in senior communities and other residential developments in the township, Midgley said.

Midgley said vacant and abandoned properties can detract from the health, safety and welfare of the neighborhoods. Some of these properties have yards that are unkempt, damage or debris, or are not secured, he said.

In December, the township billed a total of $19,264 for mowing and maintenance services in 2013. Many of the homes that needed the maintenance were in foreclosure or had been abandoned since Hurricane Sandy, officials said.

So far in 2014, the township has received 23 notices of foreclosure, according to data from the township clerk's office.

Ocean County Sheriff Michael Mastronardy said there was a jump in the number of foreclosures in 2010 following a foreclosure moratorium the previous year. The next year, foreclosures declined in Ocean County and then spiked after Hurricane Sandy, Mastronardy said. The Ocean County Sheriff's Department handles the foreclosures and sales of the properties.

"Now we're getting back to those 2010 levels, and some of that is because of Sandy," he said.

In 2012, the Sheriff's Department received 411 foreclosures; 292 of those properties were sold, data show. But last year, the department saw the number of foreclosures more than double to 837, of which 537 have sold, he said.

It can take about 900 days for a foreclosure to make its way through the court system.

Assemblyman Brian Rumpf, R-Ocean, Atlantic, Burlington, a co-sponsor of the bill and a Little Egg Harbor resident, said the legislation is important to make communities such as Little Egg Harbor whole again.

"It's really not just about one particular property that needs attention. It's about the effect that property has on the neighboring homes, and in those cases that banks are not being responsive, we will now give towns authority to penalize them," Rumpf said.

Current law limits what the towns can require of the banks holding the properties. This legislation will require banks to hire an attorney and go to municipal court to face fines connected to the property, Rumpf said.

"This issue is literally statewide to a degree even before Sandy. We had a foreclosure crisis over the last several years, but Sandy really brought the need for this type of legislation to the forefront with all the people walking away from their homes," he said.

These problem properties can happen in any community, whether its Sandy-affected Little Egg Harbor or Galloway Township, he said.

"I think anything we can do to help municipalities maintain property, which is really what this bill is aimed at, is something I am in favor of," said state Sen. Jim Whelan, D-Atlantic.

Whelan added that whether it's municipalities telling banks to cut the grass at a property or repair a porch, enforcement needs to be aggressive.

"The banks are off somewhere else, and the people are in the neighborhood are living with these problems and a potential blight in the neighborhood. Let's face it: Nothing good happens in an abandoned building," he said.